Brexit: What is the State of Play?

IIEA17th February 20167min
On Thursday, 18 February 2016, European Heads of State and Government meet in the European Council to discuss, amongst other matters, a proposed New Settlement for the UK in Europe. This blog sets out the current state of play in the negotiations.

On Thursday, 18 February 2016, European Heads of State and Government meet in the European Council to discuss, amongst other matters, a proposed New Settlement for the UK in Europe. This blog sets out the current state of play in the negotiations.

The Cameron Letter and the UK’s reform agenda

In a letter to the President of the European Council, Donald Tusk, on 10 November 2015, UK Prime Minister David Cameron set the broad parameters of the coming negotiation, under four headings, namely: improving the EU’s competitiveness; changes to the EU’s economic governance to ensure that non-euro Member States are not at a disadvantage compared to those in the Eurozone; modifications to the EU’s rules on benefits and freedom of movement, including combatting abuses of the system; and, under the heading of sovereignty, reinforcing the role of national parliaments in the EU legislative process, and ensuring that the concept of ‘ever closer union’, first introduced in the preamble of the Treaty of Rome in 1957, is not interpreted as a commitment to creating a European superstate.

The UK’s ‘New Settlement’

Responding to this letter in early February 2016, President Tusk published a draft decision taking into account the UK’s concerns. The draft decision proposes possible solutions to each of Mr. Cameron’s desired reforms, including:

– A package designed to increase the EU’s competitiveness, setting targets for the reviewing and streamlining of cumbersome legislation;

– A recognition of the UK’s concerns over the EU’s Economic Governance, acknowledging the need to take account of the concerns of non-euro Member States during the decision-making process and exempting them from any future financial contributions to Eurozone crisis measures, but, importantly, not allowing these Member States to veto or delay decisions relating to the Eurozone

– A commitment to review secondary legislation relating to freedom of movement, in order to combat abuses of the system; and a ‘safeguard mechanism’ to allow Member States to put temporary limits on EU migrants claiming benefits in a particular host-state.

– A clarification on the issues of national sovereignty, including that the phrase ‘ever closer union’ does not compel all Member States to aim for a common political destination; and a streamlining of the existing ‘subsidiarity control mechanism’ which allows national parliaments to raise objections to legislation deemed to contradict EU subsidiarity rules.

What is the position of the Member States?

Initial fears that Mr. Cameron’s reform agenda would prove critically divisive appear not to have been founded and, as the summit approaches, it appears that the EU may be closer to reaching that rarest of compromises: one in which all sides could be satisfied.

The competitiveness issue has long been considered the low-hanging fruit of the negotiations, resonating as it does with the existing agenda established under Vice-President of the European Commission, Frans Timmermans. Indeed, this heading is unlikely to cause any difficulties – after all, few would argue that the interests of the UK and the Member States are mutually exclusive when it comes to issues such as pursuing trade deals or improving the Union’s competitiveness.

From the Irish perspective, after the worst economic crisis in a generation, and with signs of economic recovery, any advantage for business will be welcome.

On the issues of Economic Governance, there seems again to be a growing convergence of the Irish, British and European positions (albeit with some caveats). As was noted in the IIEA book, Britain and Europe: The Endgame, Ireland does have an interest in defining new rules for relations between euro and non-euro members, primarily because these relations directly affect Northern Ireland and Irish relations with Britain. Other Member States, however, may be inclined to approach this issue with more caution. According to the European Council on Foreign Relations’ Britain in Europe Renegotiation Scorecard, to which the IIEA contributed, France, in particular, has concerns in this area, particularly with respect to the ambiguity of the language in the draft decision.

The heading of sovereignty might have seemed, on first examination, to be the most likely to test support of the UK’s proposals for reform. However, the issue has so far been approached with pragmatism by the UK and the other 27 Member States. Even on the issue of ‘ever closer union’ there appears to be a growing willingness to recognise the UK’s demands in some form or other, shaped by an acknowledgement among Member States that the phrase is ambiguous and does not necessarily describe a common political destination.

There may well be some wariness from certain Member States at the prospect of formalising this concept, but the framework proposed in the Draft Decision, which builds upon the European Council Conclusions of June 2014[1], seems a workable compromise. Some linguistic finessing may be required to make it palatable to all parties, but achieving that goal should be a relatively trivial matter. For Ireland, as for many Member States, the key issue will simply be that the process of integration be permitted to continue as the other Member States see fit, and that no one state be permitted to block this process for the others.

While the issues noted above do not seem intractable, the migration issue, and in particular the sub-heading of benefits, continues to be somewhat problematic. Had the UK approached the issue purely from the perspective of curbing specific abuses of freedom of movement, such as welfare fraud, sham marriages and strengthened powers for deportation and re-entry bans, the negotiation would be a short one. After all, the renewed security focus of the Union has emphasised that these are issues of common concern for the Member States. But having made the benefits issue a substantial focus of UK policy in the past 12 months, it has by now become the sine qua non of David Cameron’s negotiating position. A failure to produce a marketable result on the topic will, in the eyes of many in the UK, relegate the exercise to the level of Harold Wilson’s “trivial renegotiation” of 1975.

The ‘safeguard mechanism’ or ‘emergency brake’ proposed in the draft decision does seem a bespoke compromise: the fact that it is a Europe-wide mechanism controlled by the Commission and Council, rather than a UK-specific exception, should address widely held concerns surrounding the need to adhere to the core European principle of non-discrimination. Meanwhile the European Commission’s assertion that the UK’s present situation meets the requirements for deploying the mechanism addresses Mr. Cameron’s need to achieve an immediate and tangible solution to the benefits question.

As outlined in the ECFR report, however, the concept of limiting free movement through any means remains troublesome for certain Member States and could yet hinder an agreement this week.

Conclusion

Overall, the February Council will likely be approached with sense of cautious optimism. Certainly, the pragmatism that has characterised the discussions to date provides grounds for such, but clarity is still needed on certain key issues and for the time being the outcome of the negotiation remains uncertain.

It is worth noting, by way of conclusion, that Wednesday 17 February marked the 30th anniversary of the first signing of the Single European Act – the blueprint for the Single Market, and arguably one of Europe’s greatest political achievements. On 18 February 2016, European Heads of State and Government will attempt to agree on a permanent and lasting solution to the UK’s European question. Seeking omens in such a coincidence may be unwise – so too would attempts to predict the outcome on this occasion. The coincidence, however, will not be lost on the assembled Heads of State and Government, and there will surely be acknowledgement that a failure to reach an agreement could have implications every bit as long-lasting as the agreement that took place three decades prior.

Unlike that occasion, however, Mr. Cameron will surely hope that achieving European unity will not require a second attempt.

 


[1] The June 2014 Council Conclusions stated:

The UK raised some concerns related to the future development of the EU. These concerns will need to be addressed. In this context, the European Council noted that the concept of ever closer union allows for different paths of integration for different countries, allowing those that want to deepen integration to move ahead, while respecting the wish of those who do not want to deepen any further.